By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

So let’s talk American Horror Story and the liability of prior owners for dangerous conditions. Our favorite fun subjects, right? Before things got too silly, there’s an episode where [spoiler alert] somebody dies and gets buried under the gazebo. This being a horror show, the victim is not content stay under the gazebo. Said victim gets out and causes all sorts of mayhem, including injuries and some pretty serious property damage. Would you stop throwing stuff around? If you, dear reader, saw a great investment opportunity in this property and bought it nonetheless, would you be liable for this victim’s subsequent mayhem on your tenants?

OK, well, let’s put it in slightly more realistic terms. Let’s say you build a nice fish pond in your back yard, because you like Japanese carp. You get that promotion and transfer across the country and away you go.  You sell the property to Mrs. Investor, who is most definitely going to rent it out. She does, and the new family moves in and their toddler drowns in the pond. Are you, dear reader — seller — liable for that wrongful death claim? Come on — you know the answer. What were we discussing all last year?

Control. Once you sell the property, do you have the ability to go back in and warn the new tenant about the pond? Can you remove it? You think the new owner would like you going on the property with some bulldozers on the grounds that you want to make it safe for her new tenants? I didn’t think so. Congrats — you readers and California law are in accord!  The California Supreme Court in Preston v. Goldman said there was no liability. The main issue was, as usual, control. The seller, even though he installed the pond, had no right to control the danger related to it once he sold it. He could not remove the pond, fence it off, warn about it, or control who came onto the property.

The situation might be different if this were some kind of special, hidden carp pond that you, dear reader, forgot to disclose to the purchaser. Or if you installed a garden cover that was camouflaged and did not tell the owner how to access it, or some other hidden danger that led to the death. Then you might be liable if the buyer would not discover it under most circumstances, i.e., if the seller could discover the hidden carp pond with a reasonable inspection, you would be off the hook.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Steve Boudreault, Buildium, Boston, MA

It all comes down to Sunday.

The journey that started back in September for the Baltimore Ravens and the San Francisco 49ers ends at the Mercedes-Benz Superdome in Nawlins, with one team going home with the championship and the glory, and one team just going home.

Ostensibly, the two teams in the Super Bowl are the two best teams in football. But how do you quantify “best”? One could make a case for the Atlanta Falcons, who were undefeated for the bulk of the season and shared the best record in the NFL with the Houston Texans. Or one could make a case for the New England Patriots (those of us in Boston certainly do), who picked a bad day to have a bad day in the playoffs.

So then why the Ravens and the 49ers? It’s actually a simple formula, really: it’s equal parts talent, preparation, execution, and luck. The same qualities that can make your property management team ready for the big time.

Talent: Do you have the best possible people working for you? Are they creative in their solutions to day-to-day issues on the property? Are they smart and dedicated? Do they bring an intensity and an energy to the team? Do they work as a team? When it comes to talent, you can’t compromise.

Preparation: Are the folks on your property management team proactive? Do they figure out situations before they escalate into problems? Are they organized and ready for walk-ins and showings? Are they on top of everything? Being prepared extends to everything your team does.

Execution: Is your team big on follow-up and follow-through? Do they show up when and where they’re supposed to? Do they put their collective best foot forward and present the property in the best possible light? When it comes to paperwork, do they have all their i’s dotted and t’s crossed? Being prepared is nothing if there’s a failure to execute.

Luck: Luck is the one element that’s beyond your control, but if good fortune smiles, a high-caliber team can capitalize on it. And a team never, ever takes luck for granted.

Your property management team may not wear shoulder pads or eye black (but if they do, please send us a photo), but they can be just as successful as whichever team prevails this Sunday. And remember — neither the Ravens nor the 49ers were Super Bowl teams at the beginning of the season. The ups and downs, trials and tribulations, and blood, sweat, and tears of a grueling season forged them into what they are at this moment. The Ravens got where they are as a team. So did the 49ers. So can your team.

Enjoy the big game!

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

So my wife and I recently started binge watching American Horror Story on Netflix. It stars that Dylan McDreamy from those ’90s WB teen dramas, and the wife of the coach on Friday Night Lights, Connie Britton. She is great, as usual. He is able to muster tears at the drop of the hat, as usual. But like most horror films/series that involve strange happenings in a house, these two characters never get out of a house that they so obviously should have never bought in the first place. And then when, [spoiler alert] you know, they are almost murdered by copycat killers and find out the house is on a famous murders of L.A. tour, they STILL don’t move out. It takes some steam out of the proceedings. In between the quite obviously scary parts — the first four or so episodes were really, really scary — I found myself, as you would, contemplating the legal implications of all this on-the-screen horror.

So, prior to purchase, the real estate agent discloses to McDreamy and coach’s wife that, oh, by the way, the previous owners died in a murder/suicide. But she does not disclose that, oh, just about every previous occupant has also been murdered or sent to prison. The fabricated legal explanation of a three-year period aside, I found myself thinking that it would be a pretty big concealment — i.e., misrepresentation — to not mention such shenanigans.

But the really fun part was thinking — could McDreamy and coach’s wife sue the prior owner for the obvious dangers lurking in the basement? Well, maybe in real life they could, for dangers in the house that the previous owner knew about but did not fix or disclose. Property sold, new owner gets sued by new tenants, can tenant or new owner go after the seller? There are three (as usual) ways the law in California looks at that type of issue.

One way of thinking is that, hey, “carpe diem,” baby. No, not really – not “seize the day.”* I mean “caveat emptor” — buyer beware. The law might look at the new owner and say that the previous owner’s liability ended when he sold the property to the new owner. The buyer, after all, if he has any sense, has to do an inspection. (Hint: Be sure to look in the BASEMENT!) Another way of thinking, which is probably more modern, is to put the prior owner on the hook if the defect was known, not so obvious, or hidden (like that demon that only appears from time to time in the basement), or if the property as sold presents a risk to persons off the premises. Finally, if the seller created the hazard (such as by ill-advised seance), then he may be liable.

So the moral is, always check the basement and move out the moment you get a whiff of funny activity there, or if you find out your house is on the L.A. murders tour.

*Obviously, you know this movie. But virtual high five if you put it in the comments section without googling.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Steve Boudreault, Buildium, Boston, MA

As of this morning, the population of this little blue ball we call home was 7,061,514,434. And that doesn’t even take into account the number of babies born in the time it took to write that first sentence. As anyone who takes public transportation in the morning can tell you, this planet is packed.

Most of the preeminent scientists of our day — including the renowned Stephen Hawking — agree that the future of humanity doesn’t rest here on Earth. It’s the old adage of keeping all your eggs in one basket: there’s too much of a chance that catastrophe will strike either externally (a rogue comet or solar flare) or internally (exhaustion of our natural resources) and wipe out humans with one swift stroke. In order to better guarantee that humanity lives on, we need to set up colonies on the moon, on Mars, or in orbiting space stations. That way, if something ever happens here on terra firma, our race will continue.

But while moon bases and miniature Deep Space Nines are ambitious, some scientists prefer to think big. Like, really big. One of those scientists is Freeman Dyson, who in 1960 came with the concept of a megastructure known as a Dyson sphere.

A Dyson sphere, for our purposes, would essentially be a giant metal ball built around the sun. Its circumference would be the current Earth’s orbit, and its inner surface (where we would all live) would have the advantage of harnessing 100% of the sun’s energy. If thick enough, the Dyson sphere would protect us from all manner of space-borne destruction.

It would also alleviate some of that congestion we spoke of. The Dyson sphere’s inner surface would be 550 million times the surface area of the Earth.

“So,” you’re no doubt thinking, “550 million times the surface area of the Earth. They’re gonna need some serious property management.” That’s executive thinking, but hold your horses. There are a few minor issues that need to be worked out first.

The sphere would have no gravitational interaction with the sun, so it would likely drift and eventually collide with the sun. You’d probably have to install and run giant industrial fans in various spots on your MegaProperty to correct for the drift. And think what that’s gonna cost you.

The sphere would have no gravity of its own, so anything you put on the inner surface would simply fall into the sun. The only real solution to that conundrum would be to put everybody on the outside of the sphere, but then the sun’s light would be completely blocked and you’d be sitting on a giant metal ball in the cold vacuum of space. Good luck attracting residents to that.

There’s no known or theoretical building material that could withstand the sun’s gravitational pull, so you’d have to divide your time between being a property manager and being a theoretical physicist just to get the project off the ground. Hope you’re budgeting your time wisely.

Oh, and there isn’t believed to be enough material in the entire universe — even after mining the cores of gas giants, which we haven’t figured out how to do yet — to build a Dyson sphere. So your MegaProperty may have to be put on hold for a bit.

Still, the concept of a Dyson sphere certainly is tantalizing. If they could work out all the kinks, how many properties do you think you could manage?

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

I saw and liked the latest James Bond flick. I say latest and not “new” because I realize it was released last year and by now everyone is discussing Django Unchained. I will be ready to discuss that film in six months, when I have time to see it. Skyfall was good, but something about it bugged me. In discussing it with my brother and reading some reviews after the fact, it occurred to me: it wasn’t any fun. It was so serious! Who wants to see a drunk, depressed James Bond? Not me. He didn’t even say “Shaken, not stirred.” They just showed the bartender shaking the martini.

Fellow blog persons, as we look back at 2012, I hope I avoided Skyfall syndrome. This should be fun. Even though we discussed some serious stuff, hopefully we had fun. We have pretty thoroughly discussed the types of situations that can lead to landlord liability for injuries or damages to others, and the circumstances for attaching liability. It’s all about notice, control, and the opportunity to correct people. Having thoroughly flogged that horse to death, we’re going to shift gears and start talking about issues to look for in defending against such actions. There are (as usual) three main areas we’re going to look at. See? This is fun!

First, we’ll delve into some detail about which persons or entities are the “landlord” for purposes of imposing liability. Is it the owner, the lessor, the sub-lessor, or all three? What about the person who sold me this money pit? Can the former owner be roped into this instead of me for that obvious hole-in-the-floor trip hazard? What about the vending machine operator who maintains the soda machine that tore that guy’s hand off? Or the HOA? Which among these various entities will be on the hook?

Next, we will take a look at some potential laws (i.e., “statutes”) which provide defense (“immunity”) to such liability suits. Many states, including California, have various laws on the books which will provide the landlord defendant with a complete defense to an action wherein liability would otherwise be imposed. In other words, even if the landlord had notice, control, and an opportunity to fix, in certain circumstances the law will exonerate the defendant for public policy reasons. One such law in California provides immunity for serving booze at parties under most circumstances, so as not to mute one’s inclination to have parties. (I think a certain Buildium man’s birthday is coming up in February and I intend to celebrate it — with or without him.) We’ll talk about some of the more obvious ones to look for.

Finally, we will bust out the old case books to talk about some other defenses a landlord/owner can raise when sued. The common law of American jurisprudence and its origins in English law offer up a “plethora”* of other defenses that can be raised to defeat claims against a landlord/owner for actions. These are some concepts like “the firefighters rule” — sounds exciting, doesn’t it?!

That should take us through a good part of the year. Thanks for reading, and hope I don’t bore you.

*Virtual high five who can name the movie in which that word was used in the following context:

“Would you say I had a plethora of birthday gifts?”

“Oh, yea, boss, yea. I would say you have a plethora of birthday gifts.”

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.

By Steve Boudreault, Buildium, Boston, MA

Ah, pets. What to do about pets?

There are all sorts of policies out there when it comes to renting to people with pets. Some properties adopt a hardline stance: no pets of any kind. Some properties only allow pets that are in aquariums or cages. Some allow pets up to and including cats, but no dogs. Some allow dogs, but impose a weight limit on the little guys. Properties that allow Great Danes and Russian Wolfhounds are rare, but are out there. Expect a hefty pet deposit, though.

So what’s the story? Why so many different approaches to pets? What are some pros and cons? Read on …

Pros

Having a pet-friendly policy can mean more revenue. Some families treat their pets as full-fledged members of the family, and would sooner live on the street with pet in tow than live someplace that forced them to give the pet up. By advertising a pet-friendly policy, your property can be a shining beacon to those who are finding NO DOGS ALLOWED signs everywhere else they look. And they’ll likely spread the word to other pet owners who are looking.

More pets can equal a better community. There are numerous studies out there that show a direct connection between pet ownership and happiness. If you’ve got happy residents, you’ll have a happy property. Everyone wants a happy property. Also, there’s a greater likelihood that residents will bond because of their pets, meaning a closer-knit community as well.

Cons

Pets can be annoying or downright destructive. Some dogs head straight for the bed when their owner leaves and sleep until they come home, but some dogs will bark all day, ceaselessly, which can be a real headache for neighbors. Some cats only use the scratching post, and some prefer the unit’s lovely wall-to-wall carpeting. Even an unstable fish tank that takes a tumble can cause hundreds or even thousands of dollars’ worth of damage. Be sure to have a pet deposit in place, and make owners aware of excessive noise.

Some owners can be disingenuous. A new resident may hand over a pet deposit while showing the property manager an adorable teacup Pomeranian, and then after the paperwork is signed, sneak in their Great Dane under cover of darkness. If you suspect the ol’ bait and switch, stop by unexpectedly to see how the tenant is settling in and listen for a tiny yip or a throaty woof.

Whether you choose to allow pets in your property is ultimately up to you. Just as you’ll find pet-loving families who won’t move in without their beloved pup, similarly you’ll find families who prefer a pet-free zone, especially those with allergies.

So what’s your policy when it comes to pets?

By Steve Boudreault, Buildium, Boston, MA

Well here we are in a brand-new year, and if you’re a property manager, you’ve no doubt drawn up your plan for keeping your residents and keeping them happy in 2013. Many property managers follow a fairly standard playbook when it comes to resident perks — Super Bowl parties, free coffee in the mornings, discounts on multi-year leases, and so forth. But here’s something to consider: SatisFacts, the apartment industry’s authority on resident satisfaction and retention, discovered that the top three factors that influence a renewal decision are quality of maintenance service, safety and security, and quality of customer service provided by office staff. But what about the free peppermint candy in the leasing office? Nope. Not gonna cut it.

So how can you use these three factors to your advantage? Let’s take a look.

The quality of maintenance service is a no-brainer. It can be a challenge for larger properties, but maintenance staff showing up quickly with the most likely tools they’ll need for the issue can go a long way. And though many properties have switched to an online maintenance request system, most service requests still come via phone or in-person leasing office visit, so having staff on hand who are familiar with the most common issues and how to resolve them can be a real feather in your cap. Never having to worry about the malfunctioning garbage disposal? Who wouldn’t want to renew?

It’s no surprise that safety and security are a high priority for residents. Why would anyone want to stay somewhere they didn’t feel safe? Taking proactive steps to ensure a well-lit property filled with well-informed residents is key. Make sure that you have a good rapport with the local law enforcement. Replace burnt-out light fixtures in exterior common areas quickly. Inform residents if there have been any incidents such as break-ins, vandalism, or strangers hanging around the property, and be sure to let them know what’s being done about it. A feeling of security? Who wouldn’t want to renew?

And finally, customer service. It doesn’t matter if you have five units or 500, it all comes down to customer service. Do you have experienced professionals in place? Folks who can endure the most expletive-laced tirades with a smile? Who can make prospective tenants feel at ease, but with just enough sales experience to convince them they should take the plunge? And the $64,000 question — do you have a customer service staff that cares? Really cares about resident concerns? If so, you’ve got the biggest piece of the puzzle already in place. A pleasant voice on the other end that makes a person feel valued and appreciated? Who wouldn’t want to renew?

So? What are you doing to keep your renewal rate high this year?

By Steve Boudreault, Buildium, Boston, MA

Here in Boston, one doesn’t even need to set foot outside to know that the first Arctic blast of the season is upon us. Twitter hashtags like #brrrr and #cantfeelmytoes tell a frigid story. Facebook posts like “It’s colder than a tin toilet seat on the shady side of an iceberg!” really paint a picture. It’s cold.

Well, like it or not, winter is well and truly here, and for property managers and landlords that means winterizing the property to avoid the headaches and expenses that this harsh season can bring with it. Here are a few tips and tricks to get you through until the forsythia blooms once again.

Heating the Empty Spaces

The idea of keeping the heat on in a unit that isn’t even occupied may chafe you to no end, but the bill for the destruction that frozen pipes can cause will be even worse. You don’t need to set the thermostat to Florida, but make sure it’s at least North Carolina.

Sealing the Deal

Speaking of heat, did you know that windows, doors, and even wire entry points that aren’t caulked or stripped properly can cost you 10% more on annual heating costs? That’s just burning money, honey. A $5 tube of caulk can save you big over the long haul.

Keeping the Fire Burning

Because they tend to be tucked away in service closets or spooky basements, heaters can tend to be out of sight, out of mind. But heaters need love too. Be sure to get them serviced at least once a year to make sure they’re running at peak efficiency and to stave off any problems. They’ve got a long season ahead too.

Storming the Castle

If you’ve got storm windows on your property, now’s the time to drop them into place. You can either send out a request to your tenants, asking them to swap screens for storms, or let them know that a maintenance person will be coming by to do so. Either way, batten down the hatches.

Laying it Flat

The jump from the heating bill in August to the heating bill in January can be a little jarring. Some utility companies will bill you at a flat rate — that is, they’ll take all 12 months of the year and average them out, and then charge you the same amount every month. If you’re in a seasonal climate and you can get in on this deal, it will likely spare lots of cursing when the cold rolls in.

Here in New England, there’s not much more we can do in the winter than hunker down and wait it out. Hopefully these ideas will help you do just that. Anyone else got some cold-surviving tips they’d like to share?

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

I recently had a neighbor suggest to me that we jointly fund a new fence along my side of the property that adjoined his. The fence was dilapidated here, but nowhere else. I was open to the idea, but wondered why I should share in the cost if this was the only place my fence was having problems. On all of the other adjoining property lines the fence is fine. Why this one? Maybe because his property was six inches higher than mine on his side of the fence and was pushing into mine? Fences are frustrating.

So why would you want to build one on property you rent? There would appear to be no common law duty in California to erect fencing to prevent entry onto your rented property to prevent injury or property damage. (Check your local laws to see if they are in accord). Some scenarios might compel it — to keep third parties away from a pool or electrical hazard. But absent some kind of foreseeable danger, there would not be a requirement at law.

Indeed, could it promote new obligations if the landlord builds a fence? Certainly, the landlord would have to maintain that fence, once built. He would not want to build a dangerous one. One with loose boarding. With nails sticking out. Or a ladder leading right to barbed wire. And if the landlord builds a fence on his residential rented property, he would have to maintain it to prevent little tykes who reside therein from busting loose onto adjoining property and getting injured.

Wait a minute. What? He would? Yes. If, say, there was a creek on nearby — but not owned — property, and the landlord put the fence up to keep his tenants away from the creek, the act of creating this fence is an act of exercising “control” over the adjoining land, thereby suggesting a duty to prevent injuries on that adjoining property. Cases in California have held a duty in such scenarios.

This is contrasted in those situations where there may be a dangerous condition nearby and the landlord does not erect a fence, such as near a busy road.  There, the landlord does not owe a duty because he did not exercise any control over the busy road by erecting a fence. The plaintiff, in one case which found no duty on the part of the landlord, ”was one of many children residing in an unfenced apartment complex that fronted on a busy road. He was injured when he walked off the premises, into the road, and was struck by an automobile.”  McDaniel v. Sunset Manor Co., 220 Cal. App. 3d 1, 10 (1990).

So is it better not to erect a fence at all? As we lawyers like to say, it all depends on the facts and circumstances of the particular property and tenants. Since ATPM blog readers are responsible types, there is a strong argument to be made that the erection of a fence to prevent injury on an adjoining property is not only the right thing to do, but one which will prevent injuries (and thereby lawsuits). These loyal readers will not let their fences fall into disrepair, and thus avoid the problem altogether.

This blog submission is only for purposes of disseminating information. It does not constitute legal advice. The statements in this blog submissions do not necessarily reflect the opinions of Robinson & Wood, Inc. or its clients. No attorney-client relationship is formed by virtue of reading this blog entry or submitting a comment thereto. If you need legal advice, please hire a licensed attorney in your state.